Service sector slows in latest ISM report

The U.S. service sector slowed in October, according to the Institute for Supply Management. (Robert Gailbraith/Reuters)

The pace of growth in the U.S. services sector slowed modestly in October as new orders slipped, though employment improved, an industry report showed on Monday.

The Institute for Supply Management said its services index eased to 54.2 last month from 55.1 in September, shy of economists' forecasts for 54.5, according to a Reuters survey.

A reading above 50 indicates expansion in the sector.

The forward-looking new orders gauge fell to 54.8 from 57.7, but the measure of employment gained to 54.9 from 51.1.

The vast services sector has fared better than its manufacturing counterpart, which contracted during the summer. Still, this was the first time since June that the rate of growth in services firms has cooled.